Prohibits non-compete agreements and certain restrictive covenants; authorizes covered individuals to bring a civil action in a court of competent jurisdiction against any employer or persons alleged to have violated such prohibition.
STATE OF NEW YORK
________________________________________________________________________
3100--A
Cal. No. 1335
2023-2024 Regular Sessions
IN SENATE
January 27, 2023
___________
Introduced by Sens. RYAN, JACKSON, MAYER -- read twice and ordered
printed, and when printed to be committed to the Committee on Labor --
reported favorably from said committee, ordered to first and second
report, ordered to a third reading, amended and ordered reprinted,
retaining its place in the order of third reading
AN ACT to amend the labor law, in relation to prohibiting non-compete
agreements and certain restrictive covenants
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The labor law is amended by adding a new section 191-d to
2 read as follows:
3 § 191-d. Non-compete agreements. 1. For the purposes of this section,
4 the term:
5 (a) "non-compete agreement" means any agreement, or clause contained
6 in any agreement, between an employer and a covered individual that
7 prohibits or restricts such covered individual from obtaining employ-
8 ment, after the conclusion of employment with the employer included as a
9 party to the agreement; and
10 (b) "covered individual" means any other person who, whether or not
11 employed under a contract of employment, performs work or services for
12 another person on such terms and conditions that they are, in relation
13 to that other person, in a position of economic dependence on, and under
14 an obligation to perform duties for, that other person.
15 2. No employer or its agent, or the officer or agent of any corpo-
16 ration, partnership, limited liability company, or other entity, shall
17 seek, require, demand or accept a non-compete agreement from any covered
18 individual.
19 3. Every contract by which anyone is restrained from engaging in a
20 lawful profession, trade, or business of any kind is to that extent
21 void. For all covered individuals, no employer or its agent, or the
22 officer or agent of any corporation, partnership, limited liability
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05912-03-3
S. 3100--A 2
1 company, or other entity shall seek, require, demand or accept a non-
2 compete agreement from any covered individual.
3 4. (a) A covered individual, may bring a civil action in a court of
4 competent jurisdiction against any employer or persons alleged to have
5 violated this section. A covered individual shall bring such action
6 within two years of the later of: (i) when the prohibited non-compete
7 agreement was signed; (ii) when the covered individual learns of the
8 prohibited non-compete agreement; (iii) when the employment or contrac-
9 tual relationship is terminated; or (iv) when the employer takes any
10 step to enforce the non-compete agreement. The court shall have juris-
11 diction to void any such non-compete agreement and to order all appro-
12 priate relief, including enjoining the conduct of any person or employ-
13 er; ordering payment of liquidated damages; and awarding lost
14 compensation, damages, reasonable attorneys' fees and costs.
15 (b) For the purposes of this subdivision, liquidated damages shall be
16 calculated as an amount not more than ten thousand dollars. The court
17 shall award liquidated damages to every covered individual affected
18 under this section, in addition to any other remedies permitted by this
19 section.
20 5. Nothing in this section shall be construed or interpreted as
21 affecting any other provision of federal, state, or local law, rule, or
22 regulation relating to the ability of an employer to enter into an
23 agreement with a prospective or current covered individual that estab-
24 lishes a fixed term of service or prohibits disclosure of trade secrets,
25 disclosure of confidential and proprietary client information, or solic-
26 itation of clients of the employer that the covered individual learned
27 about during employment, provided that such agreement does not otherwise
28 restrict competition in violation of this section.
29 6. Notwithstanding section two hundred two-k of this chapter, the
30 provisions of this section shall apply to broadcast employees as defined
31 in section two hundred two-k of this chapter; provided, however, in the
32 event that any clause, section, sentence, paragraph, subdivision,
33 section, or part of this section shall be adjudged by any court of
34 competent jurisdiction to be invalid, then section two hundred two-k
35 shall remain in effect unless similarly adjudged to be invalid.
36 § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
37 sion, section or part of this act shall be adjudged by any court of
38 competent jurisdiction to be invalid, such judgment shall not affect,
39 impair, or invalidate the remainder thereof, but shall be confined in
40 its operation to the clause, sentence, paragraph, subdivision, section
41 or part thereof directly involved in the controversy in which such judg-
42 ment shall have been rendered. It is hereby declared to be the intent of
43 the legislature that this act would have been enacted even if such
44 invalid provisions had not been included herein.
45 § 3. This act shall take effect on the thirtieth day after it shall
46 have become a law and shall be applicable to contracts entered into or
47 modified on or after such effective date.
